MIDEAST: Houthi statement contains some operational details around Yemen [...]

• MNI: US 11 AUG EFFECTIVE FED FUNDS RATE 3.63% (UNCH VS PRIOR)
• EFFR PERCENTILES: 25TH 3.62% (UNCH); 1ST 3.60% (UNCH)
• EFFR PERCENTILES: 75TH 3.63% (UNCH); 99TH 3.65% (UNCH)
• US 11 AUG EFFR VOLUME USD 109 BLN (108 BLN PRIOR)

• As a result of core CPI coming in extremely close to expectations at 0.215% M/M (sa, MNI median cons 0.21 from unrounded range 0.15-0.26), trend growth rates were also as expected.
• It saw the NSA Y/Y moderate further from 2.59% to 2.48% for its softest since 2.46% in Feb which had been its softest since Mar 2021.
• There is little sign of upward momentum in latest trend growth rates in the seasonally adjusted data either, with the six-month at 2.43% annualized and three-month at 1.65% (dragged by the -0.02% M/M in June and with the 0.38% M/M from April dropping out). Ignoring the period around the government shutdown, that’s the softest three-month rate since mid-2024.
• Supercore CPI has played a large role in this moderation trend, running at 1.1% annualized over the past three months, 2.5% over the past six and 2.9% over the past twelve.
• Core goods CPI is running at 0.0% annualized over the latest three months and 0.45% over six months, with the NSA Y/Y at unchanged on the month at 0.8% for a second month (softest since Jun 2025).  
• Headline CPI meanwhile saw a slightly larger downward surprise at 0.07% (sa, MNI median cons 0.12), which still translated to the 3.4% Y/Y expected to 1 decimal place but only just at 3.36% as it cools from a recent peak of 4.25% in May. 

Modest dovish move into/in initial reaction the CPI data unwind given the in line nature of the headline and core measures.

• Supercore screened a little softer than the median of the sell-side estimates that we had seen, but that deviation wasn’t enough to move markets.
• FOMC-dated OIS prices 10.5bp of tightening for next month, 16.5bp through October and 27bp through year end, roughly in line with pre-data levels.
• SOFR futures now little changed to +5.0 on the day, with implied peak rate at 4.07% vs. 4.09% before the dovish pre-data adjustment started and within the lower half of the rough 4.00-4.30% range of recent weeks.